David abbot is buying a new house, and he is taking out a 3030-year mortgage. david will borrow $200 comma 000200,000 from a bank, and to repay the loan he will make 360360 monthly payments (principal and interest) of $1 comma 199.101,199.10 per month over the next 3030 years. david can deduct interest payments on his mortgage from his taxable income, and based on his income, david is in the 3030% tax bracket. a. what is the before-tax interest rate (per year) on david's loan? b. what is the after-tax interest rate that david is paying?

Anew firm is developing its business plan. it will require $615,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. management is reasonably sure of these numbers because of contracts with its customers and suppliers. it can borrow at a rate of 7.5%, but the bank requires it to have a tie of at least 4.0, and if the tie falls below this level the bank will call in the loan and the firm will go bankrupt. what is the maximum debt ratio the firm can use? (hint: find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.)a. 41.94%b. 44.15%c. 46.47%d. 48.92%e. 51.49%